Correlation Between Ziprecruiter and ManpowerGroup

Can any of the company-specific risk be diversified away by investing in both Ziprecruiter and ManpowerGroup at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ziprecruiter and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ziprecruiter and ManpowerGroup, you can compare the effects of market volatilities on Ziprecruiter and ManpowerGroup and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ziprecruiter with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ziprecruiter and ManpowerGroup.

Diversification Opportunities for Ziprecruiter and ManpowerGroup

0.43

Correlation Coefficient

Ziprecruiter  ManpowerGroup

Very weak diversification

The 3 months correlation between Ziprecruiter and ManpowerGroup is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ziprecruiter and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Ziprecruiter is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ziprecruiter are associated (or correlated) with ManpowerGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManpowerGroup has no effect on the direction of Ziprecruiter i.e., Ziprecruiter and ManpowerGroup go up and down completely randomly.

Pair Corralation between Ziprecruiter and ManpowerGroup

Considering the 90-day investment horizon Ziprecruiter is expected to under-perform the ManpowerGroup. In addition to that, Ziprecruiter is 1.98 times more volatile than ManpowerGroup. It trades about -0.16 of its total potential returns per unit of risk. ManpowerGroup is currently generating about -0.17 per unit of volatility. If you would invest  6,283  in ManpowerGroup on November 28, 2024 and sell it today you would lose (852.00) from holding ManpowerGroup or give up 13.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ziprecruiter  vs.  ManpowerGroup

Ziprecruiter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ziprecruiter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

ManpowerGroup

Risk-Adjusted Performance

Very Weak

Over the last 90 days ManpowerGroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ziprecruiter and ManpowerGroup

The main advantage of trading using opposite Ziprecruiter and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ziprecruiter position performs unexpectedly, ManpowerGroup can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ManpowerGroup will offset losses from the drop in ManpowerGroup's long position.

The idea behind Ziprecruiter and ManpowerGroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.